Grown up help required.

[Kharon]

Creampuff, Lead Sled, Sunfish, or any of our other learned colleagues out there in Prune Land, please explain. The Bar Room Barristers Association are puzzled, (not to mention victims of some 'robust' alemazed debate). Can you assist :-

Peuce - Just a reminder .... NO public money .... it's all Airlines' money. ASA is NOT a Government Department, funded by taxes. HOWEVER, it does contribute about $100m p.a. TO the public purse. Which, in effect, is the Airlines' "donation" to the Australian public. Aren't they nice?. (My edit).
This whole business of a 'dividend' being paid to Gummint by a Qango (spelling?) etc. We all are having some trouble understanding how it all works. It looks as though NSW kicked it all off. But; if it is a public service e.g. Air Services and it's a monopoly position; and they have admitted (Senate Estimates) overcharging 35 million and, returned a dividend (after bonus and the rest) of 100 million dollars to treasury, how can it not all be public money at the end of the day ??.

Serious appeal.

[Creampuff]

Airservices Australia (AA) is a body corporate: section 7(2)(a) of the Air Services Act 1995 (AS Act). AA therefore has separate legal personality from the Commonwealth.

The Board of AA may make a written determination that sets charges for services or facilities provided by AA and penalties for late payment of service charges: section 53 of the AS Act. AA owns that money: see AA’s general powers section 11 of the AS Act.

Section 46 of the AS Act, headed Payments of dividends by AA to the Commonwealth, says this:(1) Within 4 months after the end of each financial year, the Board must recommend to the Minister in writing that AA:

(a) pay a dividend of a specified amount to the Commonwealth, in relation to AA’s operations in the financial year; or

(b) not pay any dividend to the Commonwealth for the financial year.

(2) In making a recommendation, the Board must have regard to the following matters:

(a) the matters specified in section 13;

(b) AA’s financial results for the financial year and previous financial years, and the dividends paid under this section for previous financial years.

(3) The Minister must respond in writing to the Board’s recommendation, within 30 days, as follows:

(a) if the Board recommended that a dividend be paid, the Minister must either:

(i) approve the recommendation; or

(ii) direct AA to pay a dividend of a different specified amount; or

(b) if the Board recommended that no dividend be paid, the Minister must either:

(i) approve the recommendation; or

(ii) direct AA to pay a dividend of a specified amount.

(4) The Minister must have regard to the following matters when acting under subsection (3):

(a) the matters specified in section 13 (other than paragraph (b));

(b) the objectives and policies of the Commonwealth Government;

(c) AA’s financial results for the financial year and previous financial years, and the dividends paid under this section for previous financial years;
(d) any other commercial considerations the Minister thinks appropriate.

(5) If a dividend for a financial year is approved or directed under subsection (3), AA must pay it to the Commonwealth within 8 months after the end of that year.

(6) A payment under this section may be made out of either of the following kinds of profits, or out of a mixture of both:

(a) AA’s profits for the financial year to which the payment relates;

(b) AA’s profits for any earlier financial year or years.

[Frank Arouet]

QANGO;

Quasi autonomous non government organisation.

Also called Arm's length theology or plausible deniability.

(Which went out when Garry Powers was shot down in a U2 over Russia despite US protestations.

[Kharon]

Thanks Creampuff (again - must be my shout soon) – it gave me a head ache but at least I can see the 'mechanics' of the thing how it was done and now maintained.

Senator FAWCETT: For an organisation that I assume is meant to be a cost recovery organisation, $100 million a year appears to be a fairly large profit. I notice that the ACCC last year decided that you cannot raise your fees because they believe you are overcharging industry by some $35 million over the five-year period. What drives the requirement for ASA to generate such large profits?. Can you tell me whether any of the executives, including the CEO, have a proportion of their salary at risk? (my bold) Senator XENOPHON: Can I just follow on from what Senator Fawcett said about performance bonuses?. The last annual report of Airservices Australia says it is, under the Air Services Act, the organisation responsible for—first line—'Providing facilities for the safe navigation of aircraft within Australian-administered airspace'. Mr Mrdak, would you not be concerned if there are performance bonuses for an organisation whose first and foremost role is safety in our skies?. Mr Mrdak: The organisation, like every government authority that has financial targets, meets its financial targets, but it also has primacy in relation to safety. The expectation under the legislation that Airservices operates as a government business authority is that it is to earn a return on the capital that is invested in the business. But the primacy of the organisation is aviation safety. I do not think there is any suggestion that the organisation executives operate to any other— You can understand the confusion – in the beginning the Govt. set up and paid for a system to separate our aircraft, furry muff. As the traffic increased the system grew and became both complex and expensive. Therefore we can assume that the 'public purse' willingly and happily funded the ATC system.

At some point the ASA was 'snapped off' and like any other business was allocated seed capital and turned loose to fend for it's self, except in this instance there is no competition just a lovely big juicy monopoly. The constraints seem to be logical and of good intention: – cost recovery (Bravo) service (Bravo) and a sensibility that the enforced use of the only game in town could not be disadvantageous to the end users (Tax payers). The notion that ASA should cost recover and perhaps even self fund improvements is not onerous, a couple of bucks on every passenger ticket or built into the cost of a charter seems fair enough, actually praise worthy.

In theory all good and fair so far – enter the dragon. It should work; ASA should be able to upgrade without running to Mummy for more funds, or borrow against future earnings (they are guaranteed) and get the core business running like an old Rolex and even return some funds to poor old Joe Public for hospitals, schools, roads and the like.

So what then has gone wrong with a good idea ?. The road to Hell certainly seems paved with good intentions.

[Jabawocky]

So they generate a surplus, no problem. The question I would ask is why this is handed to the government and not invested in infrastructure and training new ATC's stuff that the people who paid the money could benefit from!

[Creampuff]

They have the power to do that, too. It's a management matter.

If the government doesn't like how the organisation is being managed, the government can change it.

We all know the bases on which governments change things.

[hiwaytohell]

Once upon a time there was the CAA! Now there is AsA & CASA.

Today AsA returns a dividend to the Government and the Government (mostly) funds CASA... about $150M, which is a lot more than the $15M or so AsA returns to the Government (FY10/11).

AsA also invested about $190M in new infrastructure same period.

The financial statements are on AsA & CASA websites!

[Kharon]

Every time I try think this issue through it just goes round and round, perhaps there is no 'silver bullet' or magic potion to fix the apparent problems; so many conflicting arguments.

There's variation between the flat earth mob, who want to be shut of all forms of control to the mandatory crowd who want every syllable and control input to be writ and enforced. There has to be a middle course probably (for my .20 c) leaning toward the belt and braces argument, just so we know that at 1800 Friday night when its a zoo, that someone, somewhere who should have turned left at Albuquerque (http://www.dukecityfix.com/profiles/blogs/albuquerque-the-real-true)did so.

We do appear to have a measurable increase in close calls.

We do appear to be short of qualified console staff and the folk to train them.

We do appear to have a traffic system which if not broken, needs some TLC.

We do appear to have grown a second head in the form of a burgeoning empire between the coal face and the halls of power.

We do appear to have a regulator and safety board which will not or cannot look at these issues.

We do appear to have wasted significant funds, not just on junkets, fees and failed projects but in the manner in which the (seemingly) adequate funds generated are utilised.

Worrals - I think that across the aviation industry in Australia there is a belief among many senior managers that big accidents can't happen. All they care about are costs and one upmanship between themselves because that's a much more real personal threat than a crash, because after all...accidents can't happen. In the real world, 1 is a big number.

Statistically, I accept the chances are theoretically, slim; but... Perhaps 'we' should adopt Cream Puffs approach.

CP - We all know the bases on which governments change things.

[Jack Ranga]

If $190M was spent on infrastructure and $100M was returned to government then $290M needs to be spent on infrastructure.

A lot of promises were made by a naughty little boy who has a penchant for credit card spending that the next CEO will have to either deliver or back down on?

Will the lies and deception continue or will a sudden dose of integrity make it's way into the organisation?

[blackhand]

The whole user pays paradigm is a system to generate extra revenue for the Government.
This frees up "tax" money for government welfare programs.